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Sunday, February 29, 2004

Smoking out smugglers

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Maryland's tax agents have moved from indifference to cigarette smugglers only five years ago to waging one of the region's most aggressive campaigns to nab tobacco bootleggers, who authorities say reap about $1 billion a year in illicit operations.

Agents from the Office of the Maryland Comptroller arrested just one cigarette smuggler in 1998 and seven in 1999. By 2003, the number of arrests had climbed to 121, with tax agents seizing 139,353 packs of contraband cigarettes worth $560,1999.

In the first six months of fiscal 2004, which began June 30, Maryland's tax police arrested 108 persons and confiscated more than 100,000 packs of smuggled smokes valued at $434,594, according to the comptroller's field-enforcement division.

"Maryland is one of the states that are out in front in this type of investigation," said Jerry Bowerman, chief of the alcohol- and tobacco-smuggling division of the federal Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF). "They have more of the proactive types of investigations."

By comparison, the District doesn't investigate cigarette-smuggling cases. And neither the chief prosecutor for the Delaware Attorney General's Office nor the top criminal investigator for the West Virginia Tax Department could recall a single cigarette-smuggling case in their jurisdictions in recent years.

Law-enforcement officials say higher cigarette taxes nationwide in the past 10 years have spawned a cigarette-smuggling racket that finances crime syndicates and terrorist groups.

"Cigarette smuggling costs the United States more than $1 billion in lost revenue every year, while pumping incredible profits into criminal organizations," Michael Garcia, assistant secretary of Immigration and Customs Enforcement (ICE), said late last month.

"It exposes a vulnerability to the American economy and a vulnerability to U.S. borders. The number of ICE investigations into tobacco smuggling has increased by roughly 300 percent since April 2001," Mr. Garcia said in a statement after federal agents had conducted the largest crackdown on cigarette smuggling in U.S. history.

The arrests of 10 persons last month in Texas, New Mexico, New York, Florida and California underscored the scope of cigarette smuggling in the United States and efforts by law-enforcement agencies to stop it.

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